Sandy Spring Bancorp Reports Net Income of $11.2 Million for the First Quarter
Company Release - 04/16/2015 07:00
OLNEY, Md., April 16, 2015 (GLOBE NEWSWIRE) -- Sandy Spring Bancorp, Inc., (Nasdaq:SASR) the parent company of Sandy Spring Bank, today reported net income for the first quarter of 2015 of $11.2 million ($0.45 per diluted share) compared to net income of $10.9 million ($0.43 per diluted share) for the first quarter of 2014 and net income of $9.1 million ($0.36 per diluted share) for the fourth quarter of 2014.
"We are off to a solid start to the year, as higher net interest income from a growing loan portfolio, together with growth in income from wealth management and mortgage banking drove first quarter operating results," said Daniel J. Schrider, President and Chief Executive Officer.
"Our consistent performance has enabled us to deliver increased shareholder value through increases to our dividends and timely repurchases of shares during the last two quarters," said Schrider.
First Quarter Highlights:
- Total loans increased 12% compared to the first quarter of 2014 and 1% compared to the fourth quarter of 2014. Growth over the prior year was 10% or better in each of the three major portfolio segments.
- Combined noninterest-bearing and interest-bearing transaction account balances increased 13% to $1.5 billion at March 31, 2015 as compared to $1.4 billion at March 31, 2014.
- The provision for loan and lease losses for the first quarter of 2015 was a charge of $0.6 million compared to a credit of $1.0 million for the first quarter of 2014 and a charge of $0.9 million for the fourth quarter of 2014.
- The net interest margin was 3.44% for the first quarter of 2015, compared to 3.47% for the first quarter of 2014 and 3.44% for the fourth quarter of 2014.
- Non-interest income increased 17% for the quarter compared to the prior year quarter primarily due to increases in income from wealth management and mortgage banking.
- During the first quarter of 2015, the Company repurchased 351,369 shares at an average price of $25.72 per share as part of its existing share repurchase program. Also, on January 29 the Board increased the Company's quarterly dividend to $0.22 per share, up from $0.20 per share in the fourth quarter of 2014.
Review of Balance Sheet and Credit Quality
Total assets grew 6% to $4.4 billion at March 31, 2015 compared to $4.2 billion at March 31, 2014. This growth was driven by a 12% increase in the loan portfolio as total loans and leases ended the period at $3.2 billion.
At March 31, 2015, combined noninterest-bearing and interest-bearing checking account balances, an important performance driver of multiple-product banking relationships with clients, increased 13% compared to balances at March 31, 2014. Total deposits and certain other short-term borrowings that comprise the funding sources derived from customers, increased 6% compared to March 31, 2014.
Tangible common equity totaled $435 million at March 31, 2015 compared to $424 million at March 31, 2014. The ratio of tangible common equity to tangible assets decreased to 10.08% at March 31, 2015 from 10.38% at March 31, 2014 due primarily to the growth in assets. Dividends per common share were $0.22 per share for the quarter compared to $0.18 per common share for the first quarter of 2014, a 22% increase. At March 31, 2015, the Company had a total risk-based capital ratio of 15.12%, a common equity tier 1 risk-based capital ratio of 14.01%, a tier 1 risk-based capital ratio of 14.01% and a tier 1 leverage ratio of 11.00%.
Non-performing loans totaled $36.0 million at March 31, 2015 compared to $38.7 million at March 31, 2014 and $34.0 million at December 31, 2014. The level of non-performing loans to total loans decreased to 1.14% at March 31, 2015 compared to 1.37% at March 31, 2014 due to growth in the overall loan portfolio. The increase in non-performing loans at March 31, 2015 compared to December 31, 2014 was driven primarily by one commercial investor real estate loan that was moved to non-performing status during the quarter. This was somewhat offset by recoveries and loan payoffs.
Loan charge-offs, net of recoveries, totaled $0.9 million for the first quarter of 2015 compared to net loan recoveries of $0.2 million for the first quarter of 2014 and net loan charge-offs of $0.6 million for the fourth quarter of 2014. The allowance for loan and lease losses represented 1.18% of outstanding loans and leases and 104% of non-performing loans at December 31, 2015 compared to 1.34% of outstanding loans and leases and 98% of non-performing loans at March 31, 2014. Non-performing loans includes accruing loans 90 days or more past due and restructured loans.
Income Statement Review
Net interest income for the first quarter of 2015 increased 6% compared to the first quarter of 2014. The net interest margin was 3.44% for the first quarter of 2015 compared to 3.47% for the first quarter of 2014.
The provision for loan and lease losses was a charge of $0.6 million for the first quarter of 2015 compared to a credit of $1.0 million for the first quarter of 2014 and a charge of $0.9 million for the fourth quarter of 2014. The current quarter's charge reflects the growth in the loan portfolio over the prior year quarter together with the increase in non-performing loans and loan charge-offs during the first quarter.
Non-interest income increased 17% to $13.2 million for the first quarter of 2015 compared to $11.2 million for the first quarter of 2014. The increase in non-interest income for the quarter compared to the prior year quarter was due primarily to increases in income from wealth management due to growth in assets under management and mortgage banking due primarily to higher mortgage origination volumes.
Non-interest expenses increased 6% to $29.2 million for the first quarter of 2015 compared to $27.5 million in the first quarter of 2014. The current quarter included increases in salaries and benefits and other non-interest expenses that were somewhat offset by a decline in intangibles amortization. The non-GAAP efficiency ratio was 60.53% for the first quarter of 2015 compared to 61.60% for the first quarter of 2014.
The Company's management will host a conference call to discuss its first quarter results today at 2:00 P.M. (ET). A live Web cast of the conference call is available through the Investor Relations' section of the Sandy Spring Web site at www.sandyspringbank.com. Participants may call 1-866-235-9910. A password is not necessary. Visitors to the Web site are advised to log on 10 minutes ahead of the scheduled start of the call. An internet-based replay will be available at the Web site until 9:00 am (ET) April 30, 2015. A replay of the teleconference will be available through the same time period by calling 1-877-344-7529 under conference call number 10063098.
About Sandy Spring Bancorp, Inc.
With $4.4 billion in assets, Sandy Spring Bancorp, Inc. is the holding company for Sandy Spring Bank and its principal subsidiaries, Sandy Spring Insurance Corporation and West Financial Services, Inc. Sandy Spring Bank traces its origin to 1868, making it among the oldest banking institutions in the region. Sandy Spring is a community banking organization that focuses its lending and other services on businesses and consumers in the local market area. Independent and community-oriented, Sandy Spring offers a broad range of commercial banking, retail banking and trust services through 44 community offices in Anne Arundel, Carroll, Frederick, Howard, Montgomery, and Prince George's counties in Maryland, and Arlington, Fairfax and Loudoun counties in Virginia. Through its subsidiaries, Sandy Spring Bank also offers a comprehensive menu of insurance and investment management services. Visit www.sandyspringbank.com for more information about Sandy Spring Bank.
Sandy Spring Bancorp makes forward-looking statements in this news release and in the conference call regarding this news release. These forward-looking statements may include: statements of goals, intentions, earnings expectations, and other expectations; estimates of risks and of future costs and benefits; assessments of probable loan and lease losses; assessments of market risk; and statements of the ability to achieve financial and other goals.
Forward-looking statements are typically identified by words such as "believe," "expect," "anticipate," "intend," "outlook," "estimate," "forecast," "project" and other similar words and expressions. Forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made. Sandy Spring Bancorp does not assume any duty and does not undertake to update its forward-looking statements. Because forward-looking statements are subject to assumptions and uncertainties, actual results or future events could differ, possibly materially, from those that Sandy Spring Bancorp anticipated in its forward-looking statements and future results could differ materially from historical performance.
Sandy Spring Bancorp's forward-looking statements are subject to the following principal risks and uncertainties: general economic conditions and trends, either nationally or locally; conditions in the securities markets; changes in interest rates; changes in deposit flows, and in the demand for deposit, loan, and investment products and other financial services; changes in real estate values; changes in the quality or composition of the Company's loan or investment portfolios; changes in competitive pressures among financial institutions or from non-financial institutions; the Company's ability to retain key members of management; changes in legislation, regulations, and policies; and a variety of other matters which, by their nature, are subject to significant uncertainties. Sandy Spring Bancorp provides greater detail regarding some of these factors in its Form 10-K for the year ended December 31, 2014, including in the Risk Factors section of that report, and in its other SEC reports. Sandy Spring Bancorp's forward-looking statements may also be subject to other risks and uncertainties, including those that it may discuss elsewhere in this news release or in its filings with the SEC, accessible on the SEC's Web site at www.sec.gov.
Sandy Spring Bancorp, Inc. and Subsidiaries
FINANCIAL HIGHLIGHTS - UNAUDITED